Business

Windfall payments hit by tax quirks

Article Abstract:

UK investors will receive windfall payments from a number of building societies and insurance companies. Some of these investors will be able to save their windfalls in personal equity plans (Peps) and their Pep allowances will not be affected. Windfall shares given by life insurers do not share the same advantages as shares from building societies due to the way that the UK tax system has developed. Cash payments may be subject to capital gains tax.

Life assurance

Article Abstract:

The United Kingdom life insurance industry has tended to use prudent accounts policies and this has smoothed returns. The sector has benefited from a re-rating due to accounting changes combined with a bull market in stocks and a government plan to change the way that people save for pensions, which could bring new business for life insurers. Prudential Corp is the largest UK life insurer, and it has been affected by a pensions mis-selling scandal.